Making the Higher Education Act Work for Students and Taxpayers

While the chances of lawmakers updating the Higher Education Act (HEA) this year appear to be dwindling by the day, higher education thought leaders and advocacy groups are continuing to advocate for their own policy priorities, in hopes of influencing Congress's future work toward reauthorization — whether it takes place in 2018 or later.

Third Way, a Washington-based center-left think tank, recently published a batch of short policy papers to serve as conversation starters for lawmakers, focusing on hot topics that have risen to the surface during discussions on reauthorization, such as accountability, accreditation reform, innovation with alternative education pathways, and better ways to measure and improve student success.

Tamara Hiler, deputy director of education at Third Way, said in an interview that it's important to continue to share ideas for elements that could be included in a reauthorization bill, even though she says she does not believe Congress will complete the process this year.

"We're actually sort of grateful we have time to continue laying the groundwork around proposals focused on accountability and student outcomes," she said. "The next reauthorization, whenever it happens, is likely going to have some sort of emphasis on institutional accountability. We wanted to pepper the landscape with a bunch of different ideas."

The proposals include ideas for how to hold institutions more accountable for their students' outcomes, a policy growing in popularity among lawmakers known as risk-sharing, and a topic NASFAA recently explored in its latest policy issue brief. While the vast majority of risk-sharing proposals have focused on, generally, requiring institutions to be "on the hook" for repaying a certain portion of students' defaulted loans, Third Way's proposal focuses on risk-sharing related to Pell Grant investment.

"Risk-sharing proposals that only hold institutions accountable for the loans students take out ignore the risk low- and moderate-income students take by using their limited Pell dollars to attend school, in addition to the opportunity costs of going to college," the paper said.

The group suggested that institutions that fail to graduate a sufficient percentage of Pell Grant students should be required to pay back a portion of the Pell funds they received. The plan would also take into consideration the portion of Pell students in an institution's overall student population, recognizing a common critique of risk-sharing proposals that the method could give an incentive for institutions to steer away from enrolling at-risk students.

Other proposals focus on how to protect federal financial aid dollars that may go to short-term programs. A provision in the House Republicans' reauthorization bill, the PROSPER Act, would expand Pell Grant eligibility to short-term programs. Other smaller bills introduced by lawmakers this Congress would expand eligibility in a similar manner. In its paper, Third Way suggested that any federal funds made available to short-term postsecondary programs should follow the charter school authorization approach, in that programs would be required to meet access and success criteria, and the funds would be authorized for a shorter period of time.

A policy proposal on limiting federal funding to certain programs also aims to prevent programs that "leave students in poverty" from accessing federal grants or loans. Third Way suggested barring access to federal aid at programs where graduates' median earnings fall below the federal poverty rate.

Other papers in the batch released this month include proposals to improve institutional accountability related to student loan repayment, including how to improve the use of a cohort default rate, and how to hold accreditors more accountable for failing to protect students.

"Our hope is to initiate these sort of conversations with a bunch of different offices so when the HEA does happen in earnest, people will feel like they have a piece of this accountability conversation," Hiler said.

She added that the think tank plans to publish more policy proposals over the next few months.

"All the broad themes lend themselves to bipartisan conversations," she said. "Certain pieces may lend themselves more so to the left or right, but there is a lot of bipartisan appetite to answer some of these questions around accountability. Hopefully as conversation starters both sides would be interested in reading them."

But in terms of lawmakers' actual progress toward a bipartisan solution to reauthorizing the HEA, Hiler said that may still take some time. Throughout the hearings both education committees in the House and Senate have held on reauthorization, there has emerged a greater consensus around the problems in higher education. But lawmakers continue to butt heads over the "how."

"It's obvious that they're having these convos behind closed doors, at least on the Senate side," Hiler said. "They're not as far along as they could or should be. Eventually they're going to have to make some decisions. My guess is they'll actually do that when it feels like this is happening in a bipartisan way."

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